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UPDATE 1-ESR plans to raise up to $1.24 bln in Hong Kong's biggest IPO this year -term sheet

Julie Zhu and Jennifer Hughes

year -term sheet@ (Adds more deal details, company background)

HONG KONG, June 5 (Reuters) - Logistics real estate developer ESR Cayman Ltd has opened the books on an initial public offering (IPO) that could raise up to $1.24 billion, in what would be Hong Kong's biggest float so far this year, showed a term sheet seen by Reuters on Wednesday.

ESR Cayman, backed by private equity firm Warburg Pincus LLC , was initially due to launch its offering on Monday, but held off as markets were shaken by fear of escalating Sino-U.S. trade tension weakening the global economy.

The company, which manages a range of funds and vehicles as well as its own directly held property investments, is selling 560.7 million shares with a split of 58% primary shares and 42% secondary - totalling 18.4% of its enlarged share capital - at an indicative range of HK$16.2 to HK$17.4 ($2.07 to $2.22) a share, the term sheet showed.

At that range, the firm could raise $1.16 billion to $1.24 billion before any greenshoe or over-allocation option is included. That would represent a market capitalisation of up to $6.75 billion after the IPO.

Seven existing shareholders are selling shares in the IPO, including Warburg Pincus, Goldman Sachs Investments Holdings (Asia) Ltd and e-commerce firm Inc's Jingdong Logistics Group Corp, showed the term sheet.

Main backer Warburg Pincus plans to cut its holdings to about 28% from 38.35%.

The deal is due to price on June 12 and trading of the shares is scheduled to start on June 20.

ESR declined to comment. Warburg Pincus, Goldman and did not immediately respond to a request for comment.

The float comes as the Hong Kong market is beginning to heat up, with two other deals which could raise over $1.6 billion between them, due to price on Wednesday.

A successful float by ESR would further provide a boost for the city which is far behind the New York Stock Exchange and Nasdaq in raising capital via IPOs, with just $5.9 billion to its credit as of May, compared with a combined $26.9 billion raised by the U.S. exchanges, showed data from Refinitiv.

Last week, Reuters reported that Chinese e-commerce giant Alibaba Group Holding Ltd was considering a second listing in Hong Kong of up to $20 billion in what could be a transformative deal if other New York-listed Chinese tech groups followed its lead.

ESR was formed in 2016 by the merger of the Japan-centric Redwood Group and China-focused e-Shang, which was co-founded with Warburg Pincus in 2011.

Describing itself in its prospectus as the largest Asia-Pacific logistics-focused property platform, ESR also said it plans to use the proceeds to pay down debt and redeem preference shares, as well as to invest in property assets and other potential acquisitions. CLSA and Deutsche Bank are joint sponsors for the IPO.

($1 = 7.8414 Hong Kong dollars)

(Reporting by Julie Zhu and Jennifer Hughes; Editing by Christopher Cushing)